Peace Bust-Up Imperils $2.2 Billion for Aid-Reliant Palestinians

The Palestinian Authority stands to lose more than $2 billion a year, or half its budget, following the announcement of its reconciliation pact with Hamas, the Islamist movement considered a terrorist group by the U.S. and Europe.

Under U.S. law, there’s a risk that the annual $440 million that American taxpayers contribute to Palestinian society will be yanked automatically. Similar terms govern the European grant of 426 million euros ($584 million), said David Kriss, the EU spokesman in Tel Aviv.

“We all know that the PA survives only through foreign donations and without them, it could collapse,” said Ahmed Awad, a political scientist at Al-Quds Open University in Gaza City.